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U.S. gasoline prices have declined slightly from their recent year-to-date high but remain at their highest summertime levels in over a decade even as the summer driving season comes to an end. National average gas prices in the United States currently stand at $3.803 per gallon, down from $3.829 a month ago but higher than $3.764 a year ago.
Strong demand and a series of refinery outages are largely to blame for the recent rise, while tightening markets have also been pushing crude prices up. Delta's 185,000-barrel-per-day refinery in Trainer as well as Irving Oil's 320,000-barrel-per-day oil refinery in New Brunswick, Canada will be down for much of September and part of October, affecting about 9% of the product supplied in their regions.
"It is fairly abnormal to see prices going up" at this time of the year. We tend to see prices declining going into the fall," Patrick De Haan, head of petroleum analysis at price tracker GasBuddy.com, has told Reuters.
Crude oil prices have also pulled back slightly after hitting their highest since November after OPEC+ heavyweights Saudi Arabia and Russia announced an extension of their respective production cuts.
WTI crude was down 0.2% to trade at $87.34 per barrel in Thursday’s intraday session at 1030 hrs ET while Brent was down by a similar margin to trade at $90.38. In July, Saudi Arabia cut one million barrels a day, good for ~10% of its typical output while Russia announced voluntary cuts of 300,000 barrels a day. Saudi Arabia’s cuts make up more than a third of the total cuts made by OPEC+ since last year.
But high gas prices are just part of the energy challenges facing the U.S. consumer. A summer of record-breaking heat has dramatically increased electricity consumption for Americans with many now struggling to keep up with their skyrocketing electric bills.
According to the U.S. Energy Information Administration (EIA), the average household spends about $262 a year on air conditioning, with costs going as high as $525 in the hot and humid Southeast.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.